A PEP — Politically Exposed Person — is an individual entrusted with prominent public functions, either domestically, in a foreign country, or by an international organisation. PEPs include heads of state, senior politicians, judges, senior military officers, senior public servants, central bank governors, and senior officials of state-owned enterprises. Close family members and known close associates of PEPs also fall within the definition. PEP status doesn't imply wrongdoing, but the elevated risk of corruption, bribery and misuse of office means PEP relationships generally require enhanced due diligence (EDD), senior management approval, source-of-wealth and source-of-funds inquiries, and ongoing enhanced monitoring. PEP screening is typically run against commercial PEP lists at onboarding and on a continuous basis.
What PEP means in practice from 1 July 2026
Tranche 2 firms will be expected to screen customers against PEP lists and apply EDD where matches occur. For sectors that haven't historically run PEP screening — law firms, accounting practices, real estate agencies — this is a new operational workflow that should be built into onboarding from day one.
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